'Crisis Management Framework for Banks in the EU' by Luca Ferrazzoli (Bank of Italy)
14 May 2025, 17:30 (Rome Time) - Phinance Online Seminars
Crisis Management Framework for Banks in the EU
by Luca Ferrazzoli (Bank of Italy)
14 May 2025, 17:30 - Rome time
Phinance Online Seminars are organized by Phinance, the Philosophy & Finance Network
17:30 Luca Ferrazzoli (Banca d’Italia) - Crisis Management Framework for banks in the European Union
18:10 Debate
Chair: Emiliano Ippoliti (Sapienza University of Rome)
The financial crisis of 2008, triggered by the collapse of Lehman Brothers, reached an unprecedented scale. In the EU alone, between 2007 and 2010, financial losses amounted to nearly 1 trillion euros, or 8% of the EU’s GDP (IMF), while state aid measures — including recapitalizations, asset relief, and guarantees — totaled around 1.6 trillion euros, or 13% of GDP. Globally, the impact of the crisis was massive, with repercussions that continue to be felt today.
In response, building on G20 initiatives through the Financial Stability Board, EU institutions adopted the Bank Recovery and Resolution Directive (BRRD) and established the Single Resolution Mechanism (SRM) to create a framework for managing bank failures without taxpayer bailouts. This framework shifts losses to shareholders and creditors but acknowledges that resolution cannot be uniform, requiring flexible, proportional strategies tailored to diverse banking models. Banking resolution is thus conceived as a continuous, adaptive process, rather than a fixed set of rules, relying on coordinated efforts across regulators, institutions, and industry.
In this talk, Luca will discuss the main challenges facing the current resolution framework and the reforms underway to address them.
An open debate follows the meeting.